Managed Democracy: How Silicon Valley, spooks and the super rich took control

“The Cambridge Analytica-Facebook scandal has dominated the headlines over the past fortnight. The allegations centre around online strategies for the manipulation of voters deployed in the US 2016 Presidential election and the UK’s European Union referendum.

Whistleblower Christopher Wylie has given evidence to parliament. Meanwhile, across the pond, Mark Zuckerberg will reportedly testify in front of the US Congress. The backlash has been brutal with the #DeleteFacebook movement taking off. Markets have responded accordingly with Facebook’s share value plummeting.

Writing in The Observer last year, Carole Cadwalladr posited that Britain (and one may as well add the US) are increasingly looking like “a ‘managed’ democracy. Paid for by a US billionaire. Using military-style technology. Delivered by Facebook. And enabled by us.”

However, the real story is much bigger than the fallout from the Trump election and the Brexit vote.

It is a story that extends beyond a limited set of players in Silicon Valley and the billionaire super class. It encompasses governments, the military and intelligence agencies intent on exploiting the internet and social media for surveillance, control and manipulation of citizens and societies.

The concept of managed democracy stretches back a hundred years. After the introduction of universal suffrage, the establishment was concerned about the outcome of elections. During the 1920s Edward Bernays was one of the pivotal figures who helped to develop the concept of managed democracy.

Bernays was the nephew of Sigmund Freud and the father of modern-day public relations. He understood that advertising could subliminally tap into the unconscious of repressed animal instincts, such as sexual desire. Bernays’ clients included some of the largest US corporations.

Bernays transplanted the same techniques into politics as outlined in Adam Curtis’s 2002 BBC documentary The Century of the Self. This could be achieved through propaganda in various guises, such as the use of mass media in order to manipulate populations.

The US military and CIA deployed psychological operations (mass propaganda induced through emotions) across the world in various theatres ranging from the wars in Korea and Vietnam to Central America during the Cold War. The only difference today is that the internet has become the new playground for 21st century psychological operations.

How Silicon Valley and the super rich took control

Silicon Valley – from heroes to villains

For a long time, Silicon Valley presented itself as the shiny, happy face of capitalism. It sold the promise of new technology that could connect the global village. Facebook’s mission statement was, “Making the world more open and connected”. The internet even held out the utopian possibility of liberating societies.

Networks amplified political activism and bypassed the monopoly of the corporate media. The internet provided a cloak of anonymity for whistleblowers fighting state and/or corporate power. Wikileaks and Julian Assange would even attempt to take credit for catalysing the Arab Spring through the Cablegate leaks revealing the corruption and vulgar excesses of tinpot dictators.

Yet as with all technology, it has proved to be a double-edged sword. Disturbing revelations have exposed a darker side of exploitative, highly secretive and even sinister practices. Public sentiment has turned from infatuation to outrage. The 2017 movie The Circle, based on the Dave Eggers novel and starring Tom Hanks and Emma Watson, tapped into the present mood of unease.

The marriage of big data and neoliberalism enabled the metrics of the market to be extended to every sphere in society. A Black Mirror episode “Nosedive” imagined the dystopian vision in which this process is taken to its logical conclusion. Every emotional experience, lived moment and interaction is exploited, mined, recorded and measured with constant recalibration interfacing with one’s personal score and therefore social status.

Edward Bernays, a nephew of Sigmund Freud, is one of those credited with creating the profession of public relations (Getty)

From here it is a short step to Foucault’s concept of the panopticon in which each person is scrutinising and scrutinised by everyone else. The mass collection and retention of data became linked in with surveillance – big brother meets big data. Simultaneously, big tech managed to carve out a libertarian philosophy while being integrated with the national security state. In fact, Silicon Valley has increasingly become part of the military-industrial complex selling its technologies to US military, intelligence and law enforcement agencies.

Google, for example, has a contract with the National Geospatial-Intelligence Agency (NGA) allowing the agency to use Google Earth Builder. Google’s mapping technology is used for geospatial intelligence purposes, such as supporting US troops in Iraq, while Google and the NGA purchased GeoEye-1, which is the world’s highest-resolution satellite.

Lacie, the protagonist in the ‘Black Mirror’ episode ‘Nosedive’, rating her social interactions on her phone (Getty)

In fact, Google has a revolving door with the national security state employing managers with backgrounds in military and intelligence work and it partners with defence contractors including Lockheed Martin and Northrop Grumman focusing on drones and robotics. Similarly, Amazon has developed a $600m (£426m) cloud computing system for the CIA that also services all 17 US intelligence agencies.

Billionaire donors​

Data-mining tech company Palantir was co-founded by Trump donor and backer Peter Thiel. Palantir’s advisers include Condoleezza Rice and former CIA director George Tenet. Its customers include the NSA, FBI and CIA due to the fact that it is a leader in the field of mining massive data sets. It has been deployed by the Marines in Afghanistan and in the Mexican drug war. Its commercial clients include Bank of America, JPMorgan, News Corp and pharmaceutical firms.

Peter Thiel is a Silicon Valley tech billionaire, who also co-founded PayPal as a system of electronic payment. He went on to give Mark Zuckerberg the first outside investment in Facebook consisting of a half-million-dollar loan later converted into a 7 per cent ownership stake and a seat on the board. Thiel’s hedge fund Clarium Capital Management had assets of more than $7bn before the financial crisis. His venture-capital firm Founders Fund has an online manifesto that begins, “We wanted flying cars, instead we got 140 characters” – summing up his pessimistic stance on the demise of technological utopianism.

Thiel has cultivated a libertarian persona outlined in a 2009 essay titled The Education of a Libertarian. This fleshes out the increasing incompatibility of capitalism and democracy since the 1920s. He argues that capitalism is “not popular with the crowd”. Thiel disparages the “unthinking demos”, which has made greater demands for social democratic concessions thus constraining capitalism.

Thiel is apparently obsessed with economic stagnation diagnosing that, “without a new technology revolution, globalisation’s discontents would lead to increased conflict and, perhaps, a worldwide conflagration”. He is contemptuous of the failure of imagination of disconnected elites with the danger being that people will turn against capitalism.

This is supported by a 2016 Harvard study, which found that a majority of American millennials reject capitalism with a third supporting socialism. It is also in keeping with the demographic shifts driving the Bernie Sanders and Jeremy Corbyn phenomena, in turn fuelled by intergenerational injustice.

Trump’s biggest campaign donor was Robert Mercer – a reclusive American hedge-fund billionaire and computer scientist. Mercer began his career at IBM working on breakthroughs in language processing integral to the development of artificial intelligence (AI). He went on to become joint CEO of the hedge fund Renaissance Technologies, which applies algorithms to model and trade on financial markets. One of its funds – Medallion – is reportedly the most successful in the world.

All of which has enabled Mercer to coordinate with the Koch brothers donating tens of millions of dollars to Republican political campaigns and ultra-conservative organisations. As The New Yorkerinvestigative journalist Jane Mayer relates, both Mercer and oil tycoon William Lee Hanley had commissioned polling from Patrick Caddell ahead of the 2016 election, which showed “mounting anger towards wealthy elites, who many Americans believed had corrupted the government so that it served only their interests.

There was a hunger for a populist presidential candidate who would run against the major political parties and the ruling class.” The data “showed that someone could just walk into this election and sweep it,” Caddell told me. When Mercer saw the numbers, he asked for the polling to be repeated. Caddell got the same results. “It was stunning,” he said. “The country was on the verge of an uprising against its leaders. I just fell over!”.

Caddell and partners later went public with the Candidate Smith project based on the idea that the public wanted an outsider Mr. Smith Goes to Washington figure as president. Worryingly, the data also revealed that the public was yearning for a strong man to fix the country.

Thiel (pictured with Donald Trump in 2016) is contemptuous of disconnected elites who he believes are turning people against capitalism

According to The Observer, Mercer applied a big data strategy to the political scene with a $10m stake in the company Cambridge Analytica. It managed to build a 230-million-strong US voter database collecting up to 5,000 pieces of demographic, psychological, consumer and lifestyle information about each individual with Facebook proving vital to this data profiling.

The company is focused on the manipulation of psychographics – the study of personality traits – although its officials claim that this was not deployed in the 2016 US election. The power of the computer algorithms in question is such that 150 Facebook likes can be modelled to predict a person’s behaviour better than a family member. Three-hundred likes effectively means that the algorithm knows you better than a spouse.

The effectiveness of this manipulation remains disputed although the power to micro-target individuals and to induce mass effects at a population level points to sinister implications. Some authorities, such as Emma Briant (author of Propaganda and Counter-Terrorism: Strategies for Global Change), have stated that Cambridge Analytica has the technological capability to effect behavioural and psychological change.

Cambridge Analytica chief executive Alexander Nix told a conference in New York his company was able to predict the personality of every adult in the US (Getty)

Cambridge Analytica’s parent company is British corporation SCL Group – formerly Strategic Communication Laboratories. SCL Group works on psychological operations and foreign propaganda campaigns. It collects large amounts of data about an audience in order to identify “persuadables” and target them with tailored messages.

Alexander Nix, the suspended CEO of Cambridge Analytica, declared at a 2016 conference in New York that, “by having hundreds and hundreds of thousands of Americans undertake this survey, we were able to form a model to predict the personality of every single adult in the United States of America”.

SCL has worked in more than 60 countries including Afghanistan, Libya, Ukraine and Pakistan. It “offers military clients techniques in ‘soft power’”, specialises in “election management strategies” and “messaging and information operations”. It has worked for Nato, the UK Ministry of Defence and the US State Department amongst others in “changing the behaviour of large groups”.

In 2012, Facebook conducted studies involving secretive psychological testing of approximately 700,000 of its users. This was through reducing exposure to positive or negative emotional content in order to measure the effects. The study concluded: “Emotions expressed by friends, via online social networks, influence our own moods, constituting, to our knowledge, the first experimental evidence for massive-scale emotional contagion via social networks.” This study was published in the Proceedings of the National Academy of Sciences, while another Facebook project looked at how users consumed information on Twitter.

According to Sam Woolley of the Oxford Internet Institute’s computational propaganda unit, one-third of all traffic on Twitter prior to the EU referendum was generated by automated “bots”, which were all pro-Leave and prior to the US 2016 election, the same automated bots were 5-1 in favour of Trump with many of them Russian.

Similarly, there were hundreds of automated websites pumping out pro-Trump messages crafting a mass consensus or political climate. Reportedly, there are thousands of dormant “sleeper” bots presumably waiting to be activated during a future crisis.

Spooks

The war on terror has enabled the state to amass authoritarian control over individuals. The Washington Post’s 2010 Top Secret America investigation painted a terrifying vision of the US morphing into an Orwellian big brother state.

Militarisation of homeland security is now extensive. General Atomics’ Predator drones monitor the Mexican and Canadian borders through real-time, full-motion video cameras. The Department of Homeland Security collects pictures, videos and other data on American citizens. It even helped Memphis police set up a crime-analysis fusion centre fitted with walls of streaming surveillance video capable of matching army command controls, while Maryland Police have infiltrated and labelled political activist groups dedicated to human rights, anti-war and bike lanes as terrorists.

This conflation of the war on terror with political activism means that the definition of terrorism is widened to include any enemy of the state and/or corporate interests. Edward Snowden and Julian Assange can thus be viewed as political prisoners or exiles.

The US Department of Defence has been funding research into the use of the internet for 21st century psychological operations. The Pentagon’s military research arm – the Defence Advanced Research Projects Agency (Darpa) – has been conducting experiments on the internet in order to study social connections, propagation of messages and influence behaviour.

In fact, Darpa invented the precursor of the internet – Arpanet, Darpa’s social media in strategic communication (SMISC) programme is developing algorithms for the “formation, development and spread of ideas and concepts (memes)” on social media. SMISC is channelling millions in funding for projects to corporations and academic hubs. This has included studies analysing how Occupy activists used Twitter, Twitter users’ opinions on fracking and interactions of Twitter users in the Middle East.

The journalist Glenn Greenwald has revealed that both the NSA (National Security Agency) and its UK sister GCHQ (Government Communications Headquarters) have been working on exploiting social media. According to the Snowden files, this entails “propaganda”, “deception”, “mass messaging” and “pushing stories”. While GCHQ described its intentions to seed “state propaganda” across the internet. GCHQ’s Joint Threat Research Intelligence Group (JTRIG) is focused on “using online techniques to make something happen in the real or cyber world” including “information ops (influence or disruption)”.

US defence corporation General Dynamics is also involved in information operations. This includes contracts with the Special Operations Command’s psychological operations unit to design websites in order to persuade foreigners to align views with US interests.

In-Q-Tel – the CIA’s venture capital firm – has been investing in companies engaged in social media mining and surveillance. Dataminr streams data from Twitter to spot trends for law enforcement agencies and hedge funds. Geofeedia collects social media messages in order to track activists for police departments and corporations. Pathar is used by the FBI to mine social media in order to determine networks and signs of radicalisation. Netbase is capable of scanning billions of sources online and Recorded Future monitors the worldwide web to predict future events.

Bruce Lund wrote in a 2012 paper that “monitoring social media” is increasingly essential for government tracking of “erupting political movements, crises, epidemics, and disasters, not to mention general global trends”. Such strategies can be exploited for counterterrorism but are also being turned against citizens by law enforcement and against activist groups by the private sector.

Palantir was thus exposed in negotiations to track trade union activists and other critics of the US Chamber of Commerce. Various police departments and corporations such as McDonald’s have contracted with Geofeedia, which markets its research into student demonstrations, Greenpeace and other political movements.

In 2008, an Obama adviser, Harvard law professor Cass Sunstein, wrote a controversial paper advocating the use of covert agents in order to cognitively infiltrate online groups, sites and activists. The Snowden files confirmed that intelligence agencies monitor sites including YouTube and Facebook, attempt to “control, infiltrate, manipulate and warp online discourse” and remarkably even carry out “false flag operations” in order to discredit targets.

In a wide-ranging New Yorker profile, Peter Thiel told author George Packer that the failures of the establishment have rekindled his optimism pointing the way either towards libertarianism or, conversely, Marxism, although he was forced to concede that unfettered capitalism is not acceptable to ordinary Americans.

Peter has cultivated a libertarian persona – a 2009 essay fleshes out what he regard as the increasing incompatibility of capitalism and democracy (Alamy)

His thinking essentially represents the extreme manifestation of a growing consensus amongst elites that the status quo is unsustainable. This could lead potentially to instability, systemic collapse and civilizational crisis. In turn, this could pave the way either towards progressive, radical post-capitalist transformation that would necessarily damage vested interests – or conversely an authoritarian order designed to cement those interests.

In fact, the status quo is liable to exacerbate inequality, poverty, climate change and social divisions ensuring that authoritarian measures are necessary in the face of increasing rioting, disruption and social unrest. Indeed, economist and writer Joseph Stiglitz, who was previously chief economist at the World Bank, has piquantly asked how long it will be before the scenes witnessed during the Arab Spring will be replicated on the streets of America.

As Thiel has put it: “The future will be much better or much worse, but the question of the future remains very open indeed. We do not know exactly how close this race is, but I suspect that it may be very close, even down to the wire. Unlike the world of politics, in the world of technology the choices of individuals may still be paramount.

The fate of our world may depend on the effort a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism.” It appears that Thiel conceives of himself as this John Galt-type heroic figure lifted straight out of the pages of Ayn Rand’s Atlas Shrugged.

The battleground of politics has expanded to include the virtual world of the internet. This is in keeping with media theorist Marshall McLuhan’s prediction that World War Three would be a guerrilla information war with no distinction between military and civilian participation.